Kerry Underwood

HIGH COURT SCRAPS COUNSEL’S FIXED COSTS IN EX-PORTAL CLAIMS: A VERY UNFORTUNATE DECISION

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The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

These principles, and the whole issue of Qualified One-Way Costs Shifting, is dealt with in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available from me here for £15.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Finsbury Food Group Plc v Dover [2020] EWHC 2176 (QB)

the Queen’s Bench Division of the High Court considered counsel’s fees in ex-portal fixed costs cases.

This case was not about whether counsel’s fees were recoverable as a disbursement on the basis that they were reasonably incurred due to a particular feature of the dispute, pursuant to CPR 45.29I(2)(h).

That controversial issue was dealt with by me very recently in my blog –

FIXED COSTS: TWO RECENT CASES .

The case here related to the quantum of the fee for counsel, or a specialist solicitor, and in particular whether or not it was fixed.

Specifically, the issue was whether CPR 45.29I(2)(c) fixes any such fee at £150 plus VAT, as per CPR 45.23B, read with Table A, or whether such a fee falls outside CPR 45 altogether and is subject to assessment in the usual way; in other words are counsel exempt from fixed fees?

This was an Employer’s Liability claim which fell out of the portal.

CPR 45.29I(2)(c) allows recoverability of “the cost of any advice from a specialist solicitor or counsel as provided for in the relevant Protocol.”

The court held that CPR 45.23B and Table 6A do not apply to ex-portal claims as CPR 45.16 states that:

“This Section applies to claims that have been or should have been started under Part 8 in accordance with Practice Direction 8B (“the Stage 3 Procedure”).”

That was not the case here.

The court rejected the submission that it must have been intended, in what was undoubtedly a fixed costs case, that counsel’s fees be fixed, and fixed at Type C level that is £150 plus VAT.

Rather, the court held that the reference to “as provided for in the relevant Protocol” in CPR 45.29I(2)(c) was a reference to the principle therein, and not the amount therein, which some may find a somewhat surprising conclusion.

The court applied the logic that the fees for expert reports are not fixed, and so counsel’s fees do not need to be fixed either, and that in some cases the protocols do fix the costs of medical reports and could have done so in relation to counsel’s fees.

Consequently, counsel’s fee in an ex-portal claim is not fixed and is subject to assessment in the usual way, and here the court assessed the fee at £500 plus VAT.

So the law now is that in an ex-portal case involving a minor, where the law requires the advice of counsel or a specialist solicitor, you will recover no fee for such advice, even though required by law – see

Aldred v Cham [2019] EWCA Civ 1780

for a detailed write-up of that Court of Appeal decision – see my blog

FIXED COSTS AND COUNSEL’S FEES: SUPREME COURT REFUSES LEAVE TO APPEAL .

Neither does counsel recover a fee where s/he has prepared and served a skeleton argument, pursuant to a court order, where the case settles the day before trial – see

Coleman v Townsend, SCC Senior Court Costs Office, 13th July 2020, Case No: PHW 1806767.

However, where there is no court order, no requirement to obtain counsel’s advice etc etc, you are free to do so and its open costs time!

 

Comment

Perhaps this singular most ill-informed decision in the short life of fixed costs, and one that seriously undermines them.

At Paragraph 25, which I set out in full at the end of this piece, the court shows a misunderstanding of the concept of fixed costs, stating that claims which have fallen out of the portal are a mixed bag.

That may be true, but Parliament has chosen to adopt a swings and roundabouts approach, or a rough with the smooth approach, and that is the whole rationale of fixed costs.

If counsel’s fee can vary according to the nature of an ex-portal case, then why not the solicitor’s fee?

What was the point of the Court of Appeal, stating in

Qader & Ors v Esure Services Ltd & Ors [2016] EWCA Civ 1109

see my blog –

FIXED COSTS DO NOT APPLY TO ALL EX-PORTAL CLAIMS: QADER OVERTURNED: PARLIAMENT IGNORED

that an ex-portal claim is subject to fixed costs forever, whatever the complexity and value, unless and until it is allocated to the multi-track?

What was the point of Parliament subsequently clarifying the Civil Procedure Rules to confirm this?

The court here, without any hint of the irony of the point it was making, said that the rules allow for an amount exceeding fixed costs if there are exceptional circumstances – see CPR 45.29J.

Yes, that is the whole point!

There have to be exceptional circumstances, and those open up the whole bill, including solicitors’ fees, and is subject to fairly elaborate procedure, with severe costs penalties on those who seek, and fail, to show special circumstances.

A court cannot use that reference to pick and choose to allow extra costs without a CPR 45.29J finding of exceptional circumstances.

At Paragraph 25 of the judgment here is almost a parody of what fixed costs are all about, and is perhaps the most ill-informed paragraph of any superior court in the short life of fixed costs.

 

Advice to Solicitors

Just get any new case automatically forwarded to counsel.

Do nothing at all.

Claim your fixed costs for doing nothing.

Claim as high a counsel’s fee as you can – after all you will have done nothing whatsoever and counsel will have done all of the work.

You do not need special circumstances; you do not need a particular feature of the dispute; you need nothing at all.

 

Further Comment

Very obviously this decision is wrongly decided, per incuriam, in conflict with a Court of Appeal decision on point, and the will of Parliament.

Expect other courts to ignore it.

2021 will be fun when fixed costs come in for all claims up to £100,000, and where counsel’s fees will be fixed.

Did the High Court here really believe that it was intended to fix counsel’s fees in a claim worth say £95,000, but not in one worth, say, £10,500?

CPR 45.29F(2) limits defendant’s costs to those which would have been payable to the claimant at the same stage of the proceedings, so claimants are now at much greater risk in personal injury proceedings.

Denis Defendant instructs counsel on a no win lower fee basis £100 plays £1,000. Claimant fails to beat Part 36 offer – now liable for £1,000 – or whatever sum the court assesses. Few cases go to trial but the chilling effect of a defendant’s Part 36 offer in a fixed costs case, which effectively disapplies QOCS, is now glacial.

It also introduces a whole new level of uncertainty; as counsel’s fee is to be assessed a claimant will have no idea, by accepting a Part 36 offer late, what they will be paying – which sort of defeats the point of fixed costs.

I am not a great fan of the way the Civil Procedure Rules are written, but in fairness, it is very clear here what the Civil Procedure Rules Committee, fortified by the Court of Appeal and Parliament, meant, and this decision defies common sense, Parliament, and the Court of Appeal.

Parliament will re-visit this – expect a cut in fixed costs.

“25. I accept all that Mr Roy says concerning the impetus for the fixed costs regime and the underlying rationale of certainty and proportionality. However, claims which have fallen out of the Protocol are a mixed bag. Some small straightforward claims may fall out of the Protocol as a result of the failure by the defendant to respond to the CNF. But there are other reasons for a claim falling out of the Protocol including notification by the claimant that the claim has been revalued at more than the upper limit; where liability remains in dispute and where contributory negligence is alleged. As Stewart J recognised in Ferri v Gill [2019] Costs LR 367, these factors are likely to be associated with a much greater level of complexity, so making quantification of the claim all the more difficult. I see nothing absurd in the costs of such an advice on valuation not being fixed in those circumstances. Indeed, it might be said that the converse is true. It would be odd if the same fixed fee were to be recovered for valuing a straightforward claim worth £15,000 as for a claim which, as it turns out, includes a high claim for loss of earnings or handicap on the labour market the quantification of which may involve considerable skill and expertise. Further, the costs allowed will not be unchecked. Just as in this case, they are subject to assessment and may be reduced on assessment.”

Written by kerryunderwood

August 11, 2020 at 3:02 pm

Posted in Uncategorized

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